|
Saloni Meghani
Archimedes has gone down in history as the man who,
accidentally discovered the principle of buoyancy while
in his bathtub, and ran out shouting "Eureka!"
But what this story does not record is the lifetime
of study and thought that culminated in the epiphany.
Tata
Metaliks is a company not willing to fall into the
trap of viewing innovation as sosmething that simply
happens one fine morning, galvanises a company and takes
it to a higher level.
"We define innovativeness as small — at times
incremental, at others breakthrough — changes brought
about with the involvement of all the employees all
the time. It comprises a large number of people making
small improvements in what they are doing, instead of
being confined to the research and development department
or product development cell," says Harsh K. Jha,
managing director, Tata Metaliks.
Mr Jha believes that it is this approach that has opened
many new business avenues and opportunities for the
company whose primary product is pig iron.
"When we recently exported our first consignment
to Japan, the customer opened the container, had one
look at the product, and emailed us immediately. He
was delighted with the consignment. This Japanese customer
has signed a long-term contract to be our exclusive
agents," says he. Tata Metaliks is the most profitable
mini blast furnace (MBF) operator in the country, it
is also economic value-added positive.
It was way back in 1999-2000 that Tata Metaliks decided
to free itself from the commodity cycles. The management
planned to make one-third its production in a niche
that would not be dependent on these ups and downs.
"Once you are wedded to me on a certain product
which meets your specific requirement exactly, you are
unlikely to move out in a hurry," says Harsh Kumar,
vice president, marketing.
Product
Keeping this in mind, Tata Metaliks has come up with
product innovations that make customers stick with them.
For the aluminium industry, it makes pig iron with
very high levels of phosphorous. While most manufacturers
take the level of phosphorous to 0.1, 0.2 or 0.25 per
cent, Tata Metaliks takes it up to a whopping 1.6 per
cent. As the company is probably among two or three
entities to offer this mix, it has presence in markets
like Egypt and Dubai, among others.
Similarly, as an ultra-high silicon product is good
for making softer and less brittle iron, Tata Metaliks
offers a silicon percentage of 3.5, compared to the
usual 2.5 or 2.7 per cent. "Smelters inform us
that hardly anyone in the country does this," says
Mr Kumar.
Tata Metaliks also offers to bundle other products
that meet the customers requirements along with the
pig iron. "If what the customers consume coincides
with what we ourselves buy, we supply it along with
the pig iron. That way we become a one-stop shop for
them," says Mr Kumar. The company uses economies
of scale in its own favour to purchase limestone and
coke, which the company requires as well, and offers
these as a package to its customers.
Service
Tata Metaliks believes that if its customers are competitive,
it is better for the company. It has also gone beyond
product offerings to providing solutions for the foundries.
It is helping the casting manufacturers optimise their
charge mix in such a way that either their cost or their
rate of rejections is reduced. It helps the customers
improve the melt rates in their cupola and to decrease
the SPN level or pollution.
"So, if the customers are buying a product from
us that costs Rs 100 more than that available in the
market, we demonstrate to them that they are probably
saving more than that with our help," says Mr Kumar.
This is a first in the Indian pig iron industry.
Most of the foundries the company caters to are small
and operate on primitive technology. Tata Metaliks makes
it its business to assist them with their technical
inputs and problem solving. "We are transferring
know-how to them free of cost. If the operator calls
on us with a problem, we send our people down to debug
it. We have already built up a reputation for this service
with our bigger customers," says Mr Jha. Interestingly,
the MBF operator did not itself have the expertise to
operate a foundry but has acquired it from consultants.
Tata Metaliks also supports the foundry operator in
the design of castings using software tools and computer
simulations. The company is, in fact, planning ahead
and even hiring foundry professionals. In the near future,
the company will look at building foundry parks, which
can bring down manufacturing cost substantially for
the foundries located close to the plant.
Bundling product and service attributes together has
also proved an effective and unconventional branding
route for Tata Metaliks.
Branding
The management realised that developing a brand in the
traditional manner required a large investment of time
and money. The company preferred the softer and yet
powerful approach of helping the customers become more
competitive. They then figured out the key factor that
would motivate customers to come their way.
Operations
Thinking laterally is, of course, not the reserve for
product or service alone, but all areas of operations.
"You won't find too many manufacturing set ups
introducing electronic cheque writing in the accounts
department," says Amit Ghosh, general manager,
finance and accounts. The company outsources the entire
activity to an international banker. Once a bill is
processed, the bank downloads the file into its systems,
prints it there, and dispatches the cheques. Also, at
any point of time the status of the cheque on any table
can be tracked.
Tata Metaliks is also ahead of competitors in the alertness
and speed with which it tracks market intelligence.
"For instance, if some MBF operator closes down,
we can make a killing by being there to fill in the
space he vacates," says Mr Jha.
"Thus, each of us has to think about how we, who
have been doing this job for many years, can do it differently,"
says Mr Ghosh.
Human resources
Sure enough then, the petri dish for innovation is not
made of brick and mortar or equipment — it is the
individual’s mind. "For employees to become
innovative, they have to be brought out of their burrows
and shown the big picture. Therefore, we decided that
each and every employee would see all the steps of activity
in the entire supply chain — from raw material
to the customer's end," says Mr Jha. This process
orientation to create knowledge employees started in
April 2003 and ended in May 2004. The company has spent
almost 2.5 times the usual amount on training and development.
This is crucial in the context of the future for which
the company is gearing up. "The employee has to
believe he can achieve all that we set out to do,"
says Mr Jha. Raw materials are also going to pose a
challenge in the next couple of years. It is crucial
for the company to manage the procurement of coke, in
particular. So far, it has displayed great agility in
switching from importing coke or switching to converting
coal into coke depending on the business cycle. It may
even look at eliminating the need for coke altogether
with the use of carbon alloys, a substitute for coke.
It is also putting up a cokery and a pig-casting machine.
The MBF operator is looking at doubling capacity without
additional manpower. Its second blast furnace will incorporate
innovative features in terms of how its environment
appears.
The company's objective is to 'reach tomorrow first'.
Tata Metaliks is not insecure about other entities catching
up with it because it does not look at earth-shattering
innovations but implementation and on constantly thinking
on its feet for success. As long as there are many Archimedeses
in this Metaliks pool, it is going to remain a ‘eureka
company’.
Other articles on innovation:
Uploaded on September 4, 2004
|
